One Shaanxi Construction Machinery Co.,Ltd (SHSE:600984) Analyst Just Made A Major Cut To Next Year's Estimates

Today is shaping up negative for Shaanxi Construction Machinery Co.,Ltd (SHSE:600984) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following this downgrade, Shaanxi Construction MachineryLtd's sole analyst are forecasting 2024 revenues to be CN¥3.0b, approximately in line with the last 12 months. Losses are forecast to hold steady at around CN¥0.67 per share. However, before this estimates update, the consensus had been expecting revenues of CN¥3.6b and CN¥0.48 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a serious cut to their revenue forecasts while also expecting losses per share to increase.

See our latest analysis for Shaanxi Construction MachineryLtd

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 1.5% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 3.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 16% per year. It's pretty clear that Shaanxi Construction MachineryLtd's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Shaanxi Construction MachineryLtd. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Shaanxi Construction MachineryLtd's revenues are expected to grow slower than the wider market. Given the serious cut to this year's outlook, it's clear that the analyst has turned more bearish on Shaanxi Construction MachineryLtd, and we wouldn't blame shareholders for feeling a little more cautious themselves.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Shaanxi Construction MachineryLtd going out as far as 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.